Good day. Thank you for standing by. Welcome to the Kirby Corporation 2023 First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kurt Niemietz. Please go ahead. Good morning. Thank you for joining us. With me today are David Grzebinski, Kirby's President and Chief Executive Officer, and Raj Kumar, Kirby's Executive Vice President and Chief Financial Officer. A slide presentation for today's conference call, as well as the earnings release, which was issued earlier today, can be found on our website at www.kirbycorp.com. During this conference call, we may refer to certain non-GAAP or adjusted financial measures. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our earnings press release and are also available on our website in the investor relations section under financials. As a reminder, statements contained in this conference call with respect to the future are forward-looking statements. These statements reflect management's reasonable judgment with respect to future events. Forward-looking statements involve risks and uncertainties, and our actual results could differ materially from those anticipated as a result of various factors. A list of these risk factors can be found in Kirby's Form 10-K for the year ended December 31st, 2022, and in other filings made with the SEC from time to time. I will now turn the call over to David. Thank you, Kurt, good morning, everyone. Earlier today, we announced first quarter revenue of $750 million and earnings per share of $0.68. Included in the results are two offsetting one-time events. One-time costs related to strategic review and shareholder engagement activities of $0.04 per share, which were offset by interest on our delayed IRS refund of $0.04 per share. The net $0.68 compares to 2022 first quarter earnings per share of $0.29. Both of our segments performed well during the quarter, delivering significantly higher revenue and operating income year-over-year. The first quarter results reflected steady market fundamentals in both Marine Transportation and Distribution Services, partially offset by significant weather and navigation challenges for marine and continued supply chain constraints in Distribution and Services. During the quarter, we remained focused on operating as safely and as efficiently as possible delivered solid results even with these headwinds. In inland marine, our first quarter results were heavily impacted by delay days. Throughout the quarter, our operations were challenged by high winds and heavy fog along the Gulf Coast and lock delays on the Illinois and Mississippi Rivers. These weather and navigational-related issues significantly slowed transit times and impacted the financial performance of our contracts of affreightment. Overall, delay days increased 31% compared to the first quarter of 2022 and 33% compared to the fourth quarter. From a demand standpoint, customer activity was strong in the quarter, with barge utilization rates running in the low to mid 90% range throughout the quarter. Tight market conditions due to strong demand and a limited supply of barges coupled with continued inflation put upward pressure on prices, with spot prices up in the low-to-mid single digits sequentially and in the 25% range year-over-year. Term contract prices also renewed higher with low double-digit increases versus a year ago. Overall, first quarter inland revenues increased 22% year-over-year and margins were in the low teens range. In coastal, market fundamentals continued to slowly improve with our barge utilization levels running in the mid-to-high 90% range. During the quarter, we saw solid customer demand and limited availability of large capacity vessels, which resulted in low double-digit price increases on term contract renewals and low 20% increases on new spot deals. As noted in the fourth quarter, however, our results were adversely impacted by planned shipyard maintenance on several large vessels. Our operations on the Gulf Coast were hindered by extensive fog throughout the quarter. First quarter coastal revenues decreased slightly year-over-year, and operating margins were negative in the low single digits. In Distribution and Services, demand remained strong across our markets, with growth in new orders and high levels of backlog. In manufacturing, revenues were up sequentially and year-over-year, driven by healthy demand for our environmentally friendly pressure pumping equipment and power generation equipment for e-frac. As expected, significant supply chain issues delayed many new equipment deliveries during the quarter. We continue to work diligently to manage these supply chain challenges. In our commercial and industrial market, overall demand remains solid across our different businesses, with growth coming from the marine repair, power generation, and on-highway sectors. In summary, our first quarter results reflected continued strength in market fundamentals for both segments, despite meaningful weather and supply chain issues. The inland market is strong and rates are pushing higher. While our coastal revenue is challenged near term by planned shipyards, industry-wide supply-demand dynamics are favorable, our barge utilization is good, and we are realizing rate increases. Strong demand in Distribution and Services is contributing to further growth in the segment, and while supply chain bottlenecks are expected to persist for the foreseeable future, the outlook for the market is strong. I'll talk more about our outlook later, but first, I'll turn the call over to Raj to discuss the first quarter segment results and the balance sheet. Thank you, David, and good morning, everyone. In the first quarter of 2023, Marine Transportation segment revenues were $412 million, and operating income was $43 million with an operating margin of 10.4%. Compared to the first quarter of 2022, total marine revenues increased $57 million or 16%, and operating income increased $26 million or 154%. Compared to the fourth quarter of 2022, total marine revenues, inland and coastal together, were down 2%, and operating income decreased 8%. Inland was up while coastal was down, and I'll add more color on this in a minute. As David mentioned, fog and high winds along the Gulf Coast produced a 33% sequential and 31% year-over-year increase in delay days, and negatively impacted operations and efficiency, while planned shipyard activity and weather impacted the coastal business. These headwinds were offset by solid underlying customer demand and improved pricing. First, I'll discuss the inland business in more detail. The inland business contributed approximately 82% of segment revenue. Average barge utilization was in the low to mid 90% range for the quarter, which is slightly better than the utilization seen in the fourth quarter of 2022 and compares to the mid-80% range in the first quarter of 2022. Long-term inland Marine Transportation contracts or those contracts with a term of one year or longer contributed approximately 55% of revenue, with 60% from time charters and 40% from contracts of affreightment. Improved market conditions contributed to spot market rates increasing sequentially in the low to mid-single digits and in the 25% range year-over-year. Term contracts that renewed during the first quarter were up on average in the low double digits compared to the prior year. Compared to the first quarter of 2022, inland revenues increased 22%, primarily due to higher term and spot contract pricing and increased barge utilization. Despite higher pricing, inland revenues were flat compared to the fourth quarter of 2022 due to the aforementioned unfavorable navigation and operating conditions. Inland operating margins were also flat sequentially, driven by the impact of a 33% sequential increase in navigation delay days, which was offset by higher pricing. Moving to the coastal business. Coastal revenues decreased 4% year-over-year as downtime from planned shipyards and poor winter weather conditions along the Gulf Coast were partially offset by higher contract prices and improved barge utilization. Coastal had a negative operating margin in the low single digits and was impacted by the increased shipyard days and adverse weather during the quarter. The coastal business represented 18% of revenues for the Marine Transportation segment. Average coastal barge utilization was in the mid to high 90% range, which compares to the low 90% range in the first quarter of 2022. During the quarter, the percentage of coastal revenue under term contracts was approximately 75%, of which approximately 90% were time charters. Renewals of term contracts were higher in the low double digits on average year-over-year. With respect to our tank barge fleet, for both the inland and coastal businesses, we have provided a reconciliation of the changes in the first quarter as well as projections for 2023. This is included in our earnings call presentation posted on our website. At the end of the first quarter, the inland fleet had 1,043 barges, representing 23.2 million barrels of capacity. On a net basis, we currently expect to end 2023 with a total of 1,053 inland barges, representing 23.4 million barrels of capacity, driven by a modest number of reactivations. Coastal marine is expected to remain unchanged for the year. I'll review the performance of the Distribution and Services segment. Revenues for the first quarter of 2023 were $338 million, with operating income of $23 million and an operating margin of 6.7%. Compared to the first quarter of 2022, the Distribution and Services segment saw revenue increase by $83 million or 32% with operating income increasing by $12 million or 107%. When compared to the fourth quarter of 2022, revenues increased by $31 million or 10%, and operating income increased by $6 million or 34%. In the oil and gas market, favorable commodity prices and increased rig and completions activity contributed to a 38% year-over-year and 15% sequential increase in revenues. We experienced strong demand for new engines, transmissions, and parts throughout the quarter. As David mentioned, we continue to navigate supply chain bottlenecks, especially in our manufacturing business. Despite these issues, the manufacturing business experienced continued favorable trends in new orders and backlog. Oil and gas re-represented approximately 44% of segment revenue in the first quarter and had operating margins in the mid-single digits. On the commercial and industrial side, strong activity contributed to a 28% year-over-year increase in revenues with improved demand for equipment, parts, and service in our marine repair and on-highway businesses. Power generation was also up year-over-year. Compared to the fourth quarter of 2022, commercial and industrial revenues increased by 6%. Our Thermo King business continued to experience delays due to supply chain constraints that impacted revenue growth. This was offset by increased activity in marine, power generation, and on-highway repair. Overall, the commercial and industrial businesses represented approximately 56% of segment revenue and had an operating margin in the high single digits during the first quarter. Moving to other items. Total general corporate expenses for the quarter were $3.5 million higher year-over-year, driven by one-time costs associated with our recently completed strategic review and shareholder engagement activities. These one-time higher costs were offset by a similar amount of interest income due on our delayed IRS refund. Please note that this shows up in other income. Turning to the balance sheet. As of March 31st, we had $27 million of cash with total debt of around $1 billion. Our debt-to-cap ratio improved to 25.9%. During the quarter, we had net cash flow from operating activities of $16.5 million. First quarter cash flow from operations was impacted by a working capital build of approximately $100 million, driven by underlying growth in the business. We continue to target unwinding working capital as the year progresses. We used cash flow and cash on hand to fund $73.2 million of capital expenditures or CapEx, primarily related to maintenance of equipment. During the quarter, we also used $3.2 million to repurchase stock at an average price just under $68. As of March 31st, we had total available liquidity of approximately $420 million. For 2023, we continue to expect to generate net cash flow from operating activities of $480 million-$580 million. Our CapEx range is high and wide this year as a number of factors are at play. First, we have a heavy shipyard schedule this year for both our inland and offshore fleet. As you know, there is a large industry maintenance bubble occurring this year and next in the inland industry due to the timing of regulatory requirements. A similar regulatory situation related to ballast water treatment systems is impacting the offshore sector. Our typical maintenance CapEx for both fleets is around $160 million-$180 million. This year, it'll be in the $230 million-$250 million range. In addition to this higher level of spending, we have some compelling strategic marine projects for specialized equipment that will add approximately $40 million to our marine CapEx. Finally, we expect to invest up to $100 million this year in electric fracking systems that we'll release to key customers. The returns related to these systems are accretive and provide long-term and stable income streams for the Distribution and Services business. In summary, our CapEx guidance for 2023 is expected to be in the $300 million-$380 million range. It is important to note that even with the anticipated higher level of capital spending, we expect to generate $150 million-$200 million in free cash flow. We are committed to a balanced capital allocation approach, and we expect to use most of this free cash flow to repurchase stock. I will now turn the call back to David to discuss the remainder of our outlook for 2023. Thank you, Raj. Although first quarter results were materially challenged by bad weather and Marine Transportation, we exited the quarter in an excellent position, and we anticipate improved results in marine as we progress through the remainder of 2023. In Distribution and Services, despite supply chain constraints, demand for our products and services is strong, and we continue to receive new orders in manufacturing. Overall, we continue to expect our businesses to deliver improved financial results in the coming quarters. While all of this is encouraging, we are mindful that challenges related to economics slowing and additional headwinds due to higher interest rates are possible. Also, labor constraints and inflationary pressures continue contributing to rising costs across our businesses, although some of this is starting to moderate. With these uncertainties in mind, we will continue to focus on costs and drive strong cash flow from our operations. In inland marine, steady demand, driven in large part by high refinery and chemical plant utilization, should continue to support higher barge utilization. Limited new barge construction and high industry maintenance requirements for the next two years, combined with lingering inflationary pressures, are expected to further support inland rate increases. Barge availability is also very constrained. These factors are expected to contribute to our barge utilization running in the low to mid 90% range for the foreseeable future. These favorable supply and demand dynamics are expected to drive further improvements in spot market and with, which represent approximately 45% of inland revenues. We also expect continued improvement in term contract pricing as renewals occur throughout the year. Overall, we expect inland revenues will grow approximately low double digits for the full year and expect near-term inland operating margins to average in the mid-teens and to gradually improve throughout 2023, ending the year close to, if not at, 20%. In coastal, market conditions are expected to steadily improve as the industry is getting closer to supply and demand balance across the fleet. Even if there is some market softness, Kirby's coastal barge utilization is expected to remain in the low to mid 90% range. Full year 2023 coastal revenues are expected to be flat year-over-year. Good fundamentals in our core liquid cargo business and higher coal shipments in our offshore dry cargo business are expected to be largely offset by the company's planned maintenance and ballast water treatment installations, which are projected to almost double maintenance days this year compared to last year. Operating margins are expected to be near breakeven to low single digits on a full year basis. Looking at Distribution and Services, we continue to have a favorable demand outlook for equipment, parts, and service across the segment. In the oil and gas market, high commodity prices, stable rig counts, and growing well completions activity are expected to provide strong demand for manufacturing and OEM parts, service, and products in the distribution business. In manufacturing, we added new incremental orders in the first quarter, and we expect this trend will continue. As I mentioned earlier, we expect the supply chain issues and long lead times from OEM equipment, which in some cases are extending beyond a year, to remain a challenge. These issues are likely to contribute to some choppiness with new product deliveries, which could potentially shift between quarters within 2023 and perhaps even some into 2024. In commercial and industrial, we expect steady demand on on-highway parts and service, driven by increased on-highway and municipal repair work. We expect continued improvement in bus ridership and increased demand for Thermo King refrigeration products. All of this may be offset a bit by supply chain delays. In power generation, new backup power installation parts and service activity are expected to remain solid as demand for electrification and 24/7 power continues to grow. Marine repair is also expected to be strong, with increasing activity in the Gulf of Mexico and improved commercial markets on the East and West Coasts. For the 2023 full year, we continue to expect revenue growth in the low double-digit range for commercial and industrial. While supply chain issues are expected to continue impacting new product and equipment deliveries in Distribution and Services, we expect 2023 segment revenues will increase by 10%-20% for the full year, with commercial and industrial representing approximately 60% of segment revenues and oil and gas representing the remainder. We expect segment operating margins will be in the mid to high single digits for the 2023 year. To conclude, overall, we're off to a solid start in 2023. Both our segments performed well during the quarter, delivering improved revenue and operating income, and our team executed well on near-term objectives. Our balance sheet is strong, and we expect to generate significant free cash flow despite higher CapEx this year, and we expect to use the majority of that free cash flow to repurchase shares. Although we see favorable markets continuing and expect our businesses will produce improving financial results in 2023, we are closely monitoring the potential for a recession and any impact that may have to our businesses. Having said that, as we look long term, we are confident in the strength of our core businesses and our long-term strategy. We intend to continue capitalizing on the strong fundamentals we're experiencing now and driving shareholder value creation with returning some capital to shareholders. Operator, this concludes. Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you'll need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, press star one one on your telephone again. Please stand by while we compile the Q&A roster. Our first question comes from the line of John Chappell of Evercore ISI. Your line is now open. Thank you. Good morning. Good morning, John. David, I wasn't gonna start here, but you kind of ended here, so it's kind of the natural progression. You know, petrochemicals and refined products have historically been very economically sensitive, and everything we've heard from an earnings season thus far has been pretty negative on the macro. You know, most economists are calling for a full-blown recession, soft, hard landing, somewhere in between for the second half. How do you contemplate your traditional kind of cyclicality of those two core businesses with the guide you've laid out? I know you're watching it, but any, you know, kind of magnitude you can give us just from historical context on the impact recession could have, mainly on inland utilization? Sure. Yeah, typically, John, you've tracked this for years, you know this, I think we see when GDP is down, you know, it generally, our volumes go up and down with GDP. Yeah, let's just say we get a mild recession that, you know, a couple percent negative GDP. That might take a couple% off our utilization. You know, as you heard, I don't wanna say we're rocking, but we're rocking. It's we're almost fully sold out. As you know, if you can't really get much better than 95% utility. We're really bullish. I would tell you, there's a lot of reasons for that. A lot of it is on the supply side as well. You know, we're very, very busy. Industry is very busy. There's this huge maintenance cycle that's happening because of the birthdays of the barge, most of the barges in the industry. You know, it's a regulatory cycle, it's gonna be really heavy for all of 2023 and all of 2024. There's, you know, that's soaking up some capacity just on its own. Nobody's really building new equipment because the cost of new equipment is still very high. The supply side is really about the best we've ever seen it. That does make it, you know, more of a demand picture. You know, you can see some of the refiners, one in particular, announced blowout earnings today. You know, the refiners are doing well. The chemicals have pulled back a little bit. The way I like to think about it is the U.S. chemical industry is probably the most efficient in the world, right? I mean, certainly they've got more secure feedstocks than Europe and better operating environment than South America and Latin America. You know, and certainly don't have the issues that Asia has. I like to think of the chemical industry is if they're gonna run the plants, the most efficient plants are the ones in the U.S. They've got the most secure feedstocks, so they're gonna continue to run it. We do worry about, you know, the recession pulling back on refined products in, you know, gasoline, diesel, jet. You know, this is just an opinion. If you go into recession, you know, maybe it's people not spending money on capital goods. Given coming out of COVID, I think the last thing they're gonna wanna cut is their travel plans, whether it's flying or driving. You know, that may be a little Pollyannish, but it feels like the demand, if it pulls back, it won't pull back a lot in our trade lanes. And even if it's, you know, a couple percent, that shouldn't impact our ability to keep pushing pricing and margin. Now that said, if it's a really deep recession and, you know, it's - 10% GDP, that's a little different. I really don't think that's gonna happen. You know, the construct is pretty good. Inventories are low. Customers are making good money. Demand seems to be holding up. You know, you can track the airlines and vehicle miles driven. You know, I remain very, very optimistic. Okay. No, the capacity context is super helpful on how it may be a bit different. My second one is a bit more optimistic tone. 1Q weather, I mean, you always have weather in 1Q, but this quarter seemed like it was pretty extreme, and you were still able to get a low-teen margin. As we think about the path towards maybe touching 2020 by the end of the year, is there a big step up in 2Q and then maybe kind of a slower grind higher as you go through the second half of the year, just as you kind of normalize? Weather and operating conditions, or would you think about it as more kind of steady progression from 1Q all the way to 4Q as contracts reset? Yeah. I mean, I think we will see a pretty big step up in Q2, and then it, you know, Q3 is almost always our best quarter. Yeah, we're gonna come out of the blocks pretty good here on Q2 and then progress through the remainder of the year. That's kind of the way I see it. I like steady though. Steady sounds, yeah. No, look, the construct is about as best we've ever seen. You know, to use a baseball analogy, we're like just starting the third inning here, and this is going to run for a couple of years. You know, I think if there is a recession that's short-lived, and, you know, with the supply and demand balance, I think we've got multiple years here in front of us. We're anxious to get our margins up to where they need to be, and we're working hard on that every day. All right. Really appreciate the perspective. Thanks, David. Thanks, John. Thank you. Please stand by for our next question. Our next question comes from the line of Ben Nolan of Stifel. Your line is now open. Thanks. You can call me whatever you want to call me. Hey, David, Raj. Hope you guys are well. I have a couple questions. Good morning. Hi. A few questions that came up as you're going through things, if I can. The first is on the coastal side. You know, it sounds like, it sounds like there's pretty good fundamental momentum in that area, and you just aren't able to realize it because of the shipyard side of things. I'm curious if it's possible, just as we think about this longer term, if it's possible for you to maybe frame in what is potentially the revenue uplift and what margins would look like if there weren't all of the shipyard dynamic this year. How much, you know, how much upside would there be in a normal environment? I think 5%-10% kind of margins. Look, you know this, Ben, we've got five ballast water treatment systems to put in remaining. You know, we're 75%-80% through our fleet, so we're almost at the tail end of this. You know, a typical ballast water treatment adds anywhere from 30-60 days to a shipyard. It can be really painful, and those are lost revenue days. We're almost at the tail end of it. We've got two ballast water treatment systems that'll be finished this quarter, being the second quarter, and that will just leave three. You know, as you heard, we lost a little money in coastal this first quarter. Some of that's weather-related, but a lot of it's shipyards. I think we said in our prepared remarks, we'll end up the year kind of low to mid-single digits for margins for coastal. I think we hit 2024. We'll hit it running and I'd be surprised if we don't hit high single digits in 2024 and maybe even exit 2024 in double digits in coastal. The, you know, the same dynamic's happening there, right? You got industries gotta deal with all these shipyards and ballast water treatment. Nobody's building any new capacity in the offshore business. Even if you were to, like, say, put an order in to build a new offshore unit, you probably wouldn't see that unit until 2026. We're now inflecting right now in terms. You heard our prices are up kind of double digits. You know, supply and demand are in balance now. We're at the inflection point on coastal, and I think it's going to start to be a good contributor, 2024 and even more in 2025, you know, as we continue to raise rates and there's, you know, no new capacity out there. If I could add, Ben, I think you'll also see that, you know, there'll be planned retirements happening in the next couple of years that's also gonna help that supply dynamic in the coastal side. Okay. That's all helpful. Then for my second question, I really wanna ask about the leasing of the fracking units. The thing that is a little bit more pressing for me as I look at it is I looked at page seven, it showed that there are 16 barges on the inland side that are being reactivated or new builds. Just curious if you can say. My impression was almost nothing was being built by you or anybody else. Are those primarily reactivations, have we begun to see anybody actually crossing the threshold here and taking a risk of building new? Ben, you know, in my prepared comments, I think, I talked about some strategic marine projects, around $40 million was allocated to that. Most of that is related to reactivations of barges that we had laid up. And, you know, for us, the way we look at it, given the tightness in the market that we're seeing right now, those barges are gonna be ready to work. You know, so we're not building new. We're just reactivating barges that we laid up. David? Yeah, no, we don't really see anybody building new now. I think there's maybe a handful of new construction out there. I mean, it's 10-20 barges max being built now. We're just not seeing building, which is good. You know, we had some equipment on the bank that, you know, we laid up that was, you know, some of the stuff that needed a little more maintenance dollars, and we laid it up during COVID, and now it makes sense to bring that off the bank and reactivate it. Once we complete this, you know, I think we'll add 10 more between now and the end of the year, and then we're pretty much done. We won't have much that we can reactivate. That is part of the CapEx picture. Okay. You did mention e-frac. You know, just to put that in context, you know, we said about $100 million. We're really excited about our offering there. What. We, you know, we started building electric fracs in 2014. We're now on our fifth generation. The new stuff is really advanced technologically. We're talking in excess of 6,000 HP on one trailer, and it's super efficient for our customers and our customers' customers. You know, that's really driving a lot of interest in this. Given the technology component of it, we wanna control that for a while. You know, are we gonna spend a lot more? No, I think this is kinda it for a while. We're really excited about it. It takes out some volatility. It'll give us some smooth earnings in KDS for a few years. It lets us control that really good technology for a while. Anyway, that's just to add on to that. I think, Ben, it's important to note that even with this higher CapEx here, we're still gonna generate $150 million-$200 million of free cash flow, and most of that is gonna be dedicated towards share repurchases. Man, you're just baiting me. I wanna keep going. I know that Greg and Jack and everybody would be a little ticked off at me if I did. I better turn it over. I appreciate it. Thank you, guys. Thanks, Ben. Thank you. Please stand by for our next question. Our next question comes from the line of Ken Hoexter of BoA. If not, your line is now open. Great. Thanks, Ben. I'm close to Greg and Jack, yeah, thanks. Good morning. Dave and Raj, I guess just following on a couple of those, the impact of all the refinery maintenance in the first quarter pull forward, you know, yet your utilization was still in the low 90s. Was pricing, I guess, backward-looking aided by that? I'm trying to figure out what happens into 2Q if there's any residual impact as you get things up and running. Does that smooth out the process? Does any impact to pricing? Is it continuing to tighten and get better? If so, what's left to reprice? Yeah. No, it's more the latter than the former. Look, weather does help by tightening up utility, right? I mean, weather just slows everything down, so that adds to kind of our barge utilization, although you don't get paid for it on the contracts of affreightment, but it does help the construct. All that said, you know, I would say momentum and the pace in spot pricing is gaining, not waning. Yeah. Even as weather gets better. It's just really tight. Ken, this industry bubble of maintenance is real. It's very tight out there, and it's gonna be tight for at least two full years. I think that's making the market a little nervous about availability, which is a good thing. You know, it's been a long time in coming. We've had some lean years. Right now, I would say the momentum is strong and if anything, it's gaining, not waning. I guess, I'll ask, maybe a couple rolled in just 'cause they're really, I guess, almost yes or no answers. You know, coastal utilization, you were just running through with Ben kind of the thoughts on the market. If we're still generating negative margins in the near term, maybe just help me understand that because if you're effectively pulling out capacity, you're talking about high util-- I mean, I can't imagine a market where utilization is in the low to mid-90s and you can't just take pri-- is it just because your contracts are so long, you can't take pricing up to meet that demand near term? Yeah. No. Yeah, go ahead. Yeah, no, I don't mean to cut you off, but in coastal, you know, it's 90% contracted. You know, those contracts are typically one year, so it just takes a full year cycle. You know, the contracts that renewed in the first quarter in coastal were up in the 20% range. You know, it's happening. We're inflecting right now. It's just because of the contract nature, you know, there's a lot less spot in the coastal market versus the inland market. Yeah, it just seems like it, we've been talking about this for a while in terms of being underwater. Lastly, I'll just throw out Ben's last question on the assets. Maybe just the $100 million you're talking about, is this doubling down in terms of your thought on D&S and keeping it in the company if we're now adding to the balance sheet? No, we're not doubling down. I would just say that this is just special. It's really good technology. The returns are very high. It's gonna be very accretive in terms of EPS. We're probably not gonna grow that portfolio. This is kind of just where we're at right now. We're pretty excited. Ken, you can imagine it smooths out earnings for the lease term, and it's gonna be very high margin for earnings. Okay. Great. Thanks for the time. Appreciate it, Dave. Thank you. Thank you. Please stand by for our next question. Our next question comes from the line of Greg Lewis of BTIG. Your line is now open. Yeah. Hey, thank you and good morning, everybody. on, you know, Raj, I guess on the puts and takes of the CapEx guidance, You called out, you know, the $100 million frack investment, you called out the $40 million barge investment. As we think about that $300 million-$380 million, is that, you know... What gets us to the low end? What gets us to the high end? If we're at the low end, does that just, a lot of that CapEx just fall through to 2024? Yeah. Greg. You know, why we gave such a wide range is the, you know, the bulk of this is going to be the shipyards. You know, David talked about the, the Coast Guard regulations-driven shipyards that the whole industry is going through. Yeah W ith that, you know, we talk about supply chain, and we talk about supply chain a lot in the D&S business, but the supply chain also is impacted when we do all this maintenance for our for our fleets here. That's why I give such a wide range because there could be some slippage that goes into next year. You know, given, you know, the way I would look at it is this maintenance bubble is gonna be probably a two-year phenomena. And part of the hedge there is because of all we're seeing with the supply chain. I think the good news though, Greg, is, you know, once we get through the bubble, you know, the free cash flow will really jump. You know, you'll start to see it jump in 2024 and then 2025, you know, our CapEx will be back down to what it was. Typically is. Yeah, typical. Still, as Raj said, we're gonna generate in excess of $150 million in free cash flow this year, even with those higher level CapEx. Yeah, we're excited about that. Yeah, no, 100%. I did wanna touch, and it was, it was interesting because when you talked about, you know, with Jonathan on the margin progression in inland, you know, it didn't seem like it, you know, going in the right direction, getting there. On the C&I and DNS, it seems like forward guidance is kind of in the, you know, mid-high single digits, and it looks, I mean, we're already there in C&I and DNS. It, you know, could you maybe talk a little bit about is that maybe C&I, is that business just where it is maybe a little bit more susceptible to recession? You know, is it something where, you know, we just have such visibility in those sectors, in those divisions that, you know, margins are just gonna kinda trend sideways for the rest of the year? Yeah. I think. Well, there's two pieces, right? I mean, there's C&I and then there's the oil and gas and the manufacturing side. You know, C&I's margins were mid to high single digits. Yeah. Manufacturing oil and gas were lower, you know, kinda low single digits to mid-single digits. When you put it all together, I think our average margin was what? 6.7%? Seven, yeah. 6.7% Uh-huh For DNS. What's really holding back the margin progression there is supply chain. You know, it's just, it takes out the efficiency in our manufacturing facilities because, you know, you're missing a part, slows down the kind of the assembly line nature of our manufacturing. You know, the supply chain challenges are amazing. It could be a camshaft for an engine, or it could be a VFD, a variable frequency drive, or it could be a, even as simple as an electric box, right? That... What that does is it impacts the efficiency, which hurts the margins. I would tell you that hoping is not the right word. We're seeing some improvement in the supply chain, but it's still every day it's there. As that gets better, you will see the margins expand. You know, I'd be disappointed if we're not into the high single digits, in 2024 in DNS. Greg, if I could add to that. As we work through the supply chain issues, you should also see the inventory unwinding progression even get better, right? You'll notice that in Q1, we had a build of working capital because, you know, business was good and we built working capital. You know, the target here is as supply chain works its way through the system, we should start to, you know, unwind that inventory position. Yeah. Raj, just to be clear, that's not part of the cash flow analysis. That would be an addition, right? Yes. Okay. Perfect. All right. Thank you for the time. Thanks, Greg. Thank you. Please stand by for our next question. Our next question comes from the line of, Greg Wasikowski, at Webber Research & Advisory. Your line is now open. Hey, guys. Good morning. You know, we're hearing the same things obviously on rate momentum and supply demand tightness. It also seems like rates are really a long way off still from building new being economically feasible. David, I was wondering if you could kind of paint a picture for us of how far off we really are, and then at any point along the way, are there any concerns over rates increasing so much that it actually hurts the competitiveness of Marine Transportation versus rail or other types of, you know, onshore alternative transportation methods? Yeah. Let me take your last question first. Gosh, we're still, you know, in terms of cost per ton mile, you know, barging is so much more cost effective from rail and certainly for trucking. We're a long way away from being non-competitive there. You know, I think, you know, just to use a number, you're gonna need $11,000-$12,000 a day to justify building new. It's, you know, the cost of the equipment's gone up. You know, something we don't talk a lot about is the cost of compliance, right? Whether it's, you know, Coast Guard regulations, Subchapter M, which is inspected towboats, the different regulations have just continued to add costs, and the insurance costs have gone up. When you put all that together, you know, we're still a ways away from rates that justify new builds. Got it. That's very helpful. Thank you. A long the same lines for the yards, you know, say, you know, one day we get there's a spike in rates that make it make sense, right? Can you comment on the state of the yards and what the process would eventually be like for them to scale up, if new build orders eventually come in? You know, how much inertia is there and how difficult would it be for them to satisfy an influx of orders if they came? Well, let me. There's two parts to the shipyards. You know, there's the repair and maintenance type shipyards, and there's a fair number of them. They're all very busy right now, and shipyard capacity is very tight. Yeah, they're experiencing everything everybody else is, where labor is tight, you know, getting labor is tight. You know, they're working extra shifts. The repair side of the shipyard situation is very tight. You know, they're trying to ramp up as much as they can in terms of the number of shifts, you know, working evenings and nights. You know, we obviously, being very large, have some really good relationships with some top-notch yards, so we're not particularly worried about it for our repair work. That's the maintenance side of the shipyards. In terms of new builds, you know, there's really one, what I would call 800 lbs gorilla out there, and that's Arcosa. They have the ability to take capacity or to produce barges. You know, they, I think could do easily 100-200 barges a year if they converted some of their dry cargo barge lines over to liquid barge lines. I just don't see that happening because the, you know, the price of new builds are so high. Arcosa has the ability to ramp up if the demand is there. There are a handful of other ones that can build liquid barges, but again, Arcosa is the big one. That said, Arcosa is very busy with dry cargo barges right now, not liquid barges. The dry cargo business is in need of some barges, and they've been building dry cargo barges, which are a lot cheaper, a lot easier to build than a liquid barge. Got it. Thank you, David. I'll pass it on. Okay. Thanks, Greg. Thank you. As a reminder, to ask a question, you'll need to press star one one on your telephone. Please stand by for our next question. Our next question comes from the line of Jack Atkins of Stephens Inc. Your line is now open. Okay, great. congrats and, good morning, guys. Thanks for taking my questions. Hey, good morning, Jack. I guess, you know, David, if I could, go back to the, to the CapEx and DNS, I think that's really interesting, as you sort of think about smoothing out the earnings power there. When would you expect to maybe start seeing accretion from that investment? Is that something that's gonna hit in 2024? Could that be second half of this year? You know, I guess how long are the, are the contracts that you're signing related to that... Yeah That process? Yeah. We're gonna start delivering those throughout this year, kind of the second half. You'll start to see some accretion in, probably in the fourth quarter. You'll see some really nice accretion in 2024. Okay. It doesn't sound like much of any of that is in your, in your earnings outlook or the sort of the line item guidance you gave. Is that fair or? Yeah, that's fair. No. Okay. I mean, they're under construction now. Yeah. You know, typically they're gonna run for about three years. Okay. Yeah. That's great. It's gonna be a really good deal. Yeah, absolutely. It's great to see. You know, you guys have market-leading technology there, so it's great to see that getting rewarded. I guess maybe kind of pivoting just to my follow-up question before I'll let you guys go. You know, as you sort of think about the cash flow ramp into next year with profitability accelerating, you know, Yeah, with CapEx coming down and profitability accelerating, you know, cash flow should really inflect, you know, higher. I guess, you know, are you potentially seeing opportunities for either, you know, additional M&A opportunities, or is it really gonna be focused more towards, you know, accelerating the buyback? How do you think about capital allocation with the cash flow increasing? Yeah, I think that's a great question. Look, you know, there's a couple deals. You know, one of our smaller competitors was bought by another competitor recently. You know, there are some consolidating acquisition prospects out there. I would tell you price expectations are pretty robust. You know this, Jack, from following us, but, you know, we're gonna stay very disciplined. I would tell you the best barge company to buy right now is Kirby. You know, the short answer is we're really focused on buying back stock. Kirby is probably in the best position we've seen it in for a long time, and we're pretty bullish. Okay. That's great to hear, guys. Really appreciate the time, and looking forward to seeing how things go from here. Take care. Thanks, Jack. Okay, thank you. At this time, I would now like to turn the call back over to Kurt Niemietz for closing remarks. Thank you, Rivka, and thank you everyone for participating on the call today. As always, feel free to reach out if you have any questions. Okay. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.